Democratization of the Energy Sector?
- Apr 22, 2016 10:00 am GMTJul 7, 2018 9:43 pm GMT
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Australia is currently at the forefront of the residential solar revolution. Why? Well, for a start, we have impressive solar resources. We also have one of the world’s most enthusiastic populations when it comes to solar technology. And now that batteries are widely available and dissatisfaction with energy utilities is high, the perfect conditions are in place for the dawn of a population of ‘prosumers’!
Researchers and those in the energy industry provide three reasons householders invest in solar technology – an interest in saving money, minimising their carbon footprint, and reducing their reliance on energy utilities. In particular, this third idea of a ‘democratised’ energy system is gaining momentum. The power of electricity generation could be in the hands of mums and dads across the country. The introduction of EV vehicles into the car market could further spur investment in integrated systems, with the potential that households could eliminate their reliance on fossil fuels altogether!
In order to help householders come to terms with these technologies there are a number of applications and service providers available to assist consumers with balancing the incoming and outgoing energy between a solar system, a battery, an electric vehicle and a home. All these tools could see consumers maximising the financial benefits of their systems, maintaining a reliability of supply and all without lifting a finger.
And yet, disconnection from the network is probably a long way off. When the days are hot and long and the air-conditioner is using more than the solar panels can produce, or in the unfortunate situation of cloudy skies for days on end during the winter months, the average residential solar/battery combo may not be able to provide enough electricity. Here’s where the energy utilities step in – acting as a back-up source of electricity to residential renewable systems. And for this service, energy utilities will charge householders.
Alternatively, however, energy utilities can see great potential in being able to access householders’ systems. If too much electricity is being pumped into a distribution line they could divert it to someone’s battery. If there’s a sudden demand for electricity, they could ‘borrow’ some electricity from this same battery. They could take out energy from an electric vehicle in the afternoon, and then replace it later at night. In doing so, network operators could avoid additional network investments. Retailers could access household energy and reduce their demand for large-scale generation at higher wholesale prices. Both would have financial benefits for the energy utilities, which could lead to significant financial benefits for consumers. And yet in both cases householders would essentially be fronting up the cash to invest in energy infrastructure that would benefit the energy utilities.
So much for democratisation?
The truth is that a ‘democratisation’ of the energy system might end up looking a lot like how the energy system looks now. Householders would invest in technology for its green benefits and for financial rewards, but all the decision-making would be transferred to a utility. The utility, whether it’s a large-scale network operator or a boutique retailer, would set prices, make decisions around the flow of energy and provide information to the consumer. The consumer, in turn, wouldn’t have to concern themselves with monitoring their own energy consumption to the nth degree, and could shop around for packages that they think provide the best financial advantages.
But how do we transition to this new state where energy utilities are actively engaged with householders and their electricity systems rather than blindly accepting electricity fed into a distribution network? Australia’s utilities have a poor reputation for engaging with the general public. Media attention has been focussing on the ‘gold-plating’ of networks in the National Electricity Market, pouring investment into networks for marginal, unnecessary reliability gains. Additionally, utilities have been guilty of alienating solar consumers in particular, with claims that solar consumers are ‘shirking their dues’ in relation to avoided network charges, and with some proposing to specifically tax solar households. The result of these interactions is simple – solar customers don’t like energy utilities.
While so much of the discussion about twenty first century energy transitions is focussed on technology and policy we forget that the greatest investors, decision-makers and promoters of the energy transition are sitting on couches, in living rooms around the world. They are trading opinions on internet forums and over cups of tea, not in corporate boardrooms. If we really want to make the most of this energy transition, if we want to minimise costs, maximise the use of renewable energy and do so efficiently we need to have the networks, retailers and, most importantly, the consumers on the journey together. And so we need to reframe the way the public looks at energy utilities, not as monolithic structures that make prices and send bills, but as integrated service-providers that are responsive to people’s needs and capable of providing accessible information that will help householders feel confident in their own decision-making.
Photo Credit: Slim Dandy via Flickr